TAMPA, FL - LM Funding America, Inc. (NASDAQ:LMFA), known for its cryptocurrency mining operations, has announced a strategic partnership with Arthur Mining Inc. to support the establishment of a new 15 MW hosting site near Oklahoma City. The specialty finance company has pledged a $2.5 million loan to a joint venture with Arthur Mining, aimed at expediting the construction of the hosting facility.
As part of the collaboration, LM Funding has secured a hosting contract for approximately 3,000 of its Bitmain Antminer S19j Pro machines at the site, which is expected to be operational by the end of June 2024. Arthur Mining has agreed to host these machines at cost for roughly nine months, which LM Funding anticipates will lead to significant expense reductions.
The partnership also includes plans to explore the development of an additional 60 MW site adjacent to the current project. This expansion would allow LM Funding to scale its cryptocurrency mining capabilities further.
Bruce Rodgers, CEO of LM Funding, expressed enthusiasm for the venture, stating that the collaboration with Arthur Mining would enable the company to focus on its core competencies while mitigating operational risks. He highlighted the growth potential and enhanced profitability through this strategic move.
LM Funding America commenced Bitcoin mining in September 2022 and operates alongside its technology-based specialty finance business. The company aids nonprofit community associations by funding delinquent accounts in various states, including Florida, Washington, Colorado, and Illinois.
This information is based on a press release statement from LM Funding America, Inc.
In other recent news, LM Funding America reported significant growth in its Bitcoin mining sector for the first quarter of 2024. The company successfully mined 86.4 Bitcoins, valued at approximately $4.6 million, and reported a net income of $1.9 million, along with a positive core EBITDA of $4.4 million. These developments come as LM Funding operates about 5,900 Bitcoin mining machines, providing roughly 614 petahash of mining capacity.
The firm is actively pursuing opportunities to reduce mining costs and is considering expansion into hosting services for AI machines. Analysts have noted that LM Funding's shares are currently undervalued and that the company has borrowed $1.5 million for strategic initiatives. This funding is expected to drive growth, even as the company's legacy business faces legislative changes in 2025.
While there were no specific financial misses reported, the company's representatives emphasized their primary focus on Bitcoin mining and advanced software integration to enhance the hash rate of existing machinery.
InvestingPro Insights
In light of LM Funding America, Inc.'s (NASDAQ:LMFA) latest strategic partnership for expanding its cryptocurrency mining operations, a dive into the company's financial metrics and market performance offers valuable context. According to InvestingPro data, LMFA currently has a market capitalization of approximately $9.87 million. Despite the company's significant revenue growth of 298.42% over the last twelve months as of Q1 2024, analysts remain cautious, as reflected in the company's negative P/E ratio of -1.86 for the same period.
The partnership's potential could be seen in LMFA's recent price performance, with a notable 61.63% return over the last month and an impressive 117.39% return over the last six months. This momentum aligns with the InvestingPro Tip highlighting the company's significant return over the last week. However, it's important to consider that LMFA is trading at a low Price / Book multiple of 0.26, which could suggest the market has not fully recognized the value of the company's assets relative to its share price.
Investors interested in LMFA's future prospects should note that the company is quickly burning through cash, as indicated by another InvestingPro Tip. Additionally, while LMFA's liquid assets exceed its short-term obligations, suggesting some degree of financial flexibility, the company does not pay a dividend, signaling that it is reinvesting earnings back into growth initiatives rather than returning capital to shareholders.
For readers looking to explore LMFA's financials and market performance further, InvestingPro offers additional insights and tips. There are currently 13 more InvestingPro Tips available for LMFA, which can be accessed through the InvestingPro platform. To deepen your analysis and gain access to these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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